Wall Street is methodically testing its systems to unearth potential snafus before the new year, when 11 European countries will swap their currencies for a single unit, the euro.

"Systems-wise, technology-wise we are pretty comfortable that everything is going to be okay," said James Kemp, head of the US currency trading at foreign exchange giant Citibank.

"We've gone through the whole back office process. The only thing out there from our point of view that could present a problem is how the dollar is going to be quoted against the euro," he said.

On January 4, the first day of trade under monetary union, outstanding Ecu contracts will be redenominated one-for-one to the euro, though the two units will be comprised of different currencies. Most notably, the British pound -- a core currency in theEcu basket -- will be absent when the new unit makes its debut.

Traders said the market will probably price euros the same way it now prices Ecus and sterling -- expressed in dollars per euro, rather than euros per dollar. The Ecu rate is currently around $1.1845.

Regulators may have little say over quoting conventions, given the self-policing nature of the forex market, Kemp said.

Otherwise, they are presiding at arms length over strategic and technical euro projects.

The US regulators are closely monitoring the preparations of commercial banks, while various financial industry associations work with members to ensure their readiness for the conversion marathon over the December 31 to January 4 weekend.

The Securities Industry Association (SIA) -- with membership covering nearly 800 broker-dealers, investment banks and mutual fund companies -- distributed a detailed handbook to help firms handle the switch to the euro.

The handbook sets out everything from ensuring conversion staff get food andcar vouchers to back-up files and updating clients on changes to their portfolio and financial statements as a result of the currency switch.

"Each firm is going to do contingency plans, or systems maintenance, or back-up a little differently," SIA vice president and director of international finance David Strongin said. "So you basically take this checklist and use it within your own organisation as appropriate."

Meanwhile, the Office of the Comptroller of the Currency has been auditing banks like Citibank for their EMU readiness.

The Federal Reserve is keeping on top of them as well, monitoring banks involved in the European markets. It ranks the importance of euro preparedness for some large institutions near that associated with Year 2000 computer projects.

Citibank plans to conduct a weekend a dry run, where euro dummy trades will be booked and jammed through the computers to make sure payments will settle correctly and traders can reconcile their positions.

Stock exchanges and equity shopshave readied their clearing systems for the euro, traders said, building in back-up systems in case of any technical glitch but generally confident that the enterprise will come off successfully.

"I don't want to say it's been on the back burner, but unless an investor or a trader is involved or specifically concerned in a European issue, I don't think it is something that is right in front of them," said Peter Coolidge, a senior equity trader at Brean Murray & Co.

"If it goes swimmingly, I don't think it's going to make our markets rally. If it crashes, I don't think we're going to collapse unless (there is a technological problem)," he said, adding that the historic economic undertaking is obviously a bigger topic in European Financial centres than in New York.

Since May, when Luxembourg, Ireland, Portugal, Finland, Austria, Belgium, Holland, Spain, Italy, France and Germany were selected as charter EMU members and the US sales forces have fanned out to explain the coming transition to investors incurrencies, stocks, bonds and futures, dealers said.

Firms have been inundated with questions on accounting, billing and invoicing issues, along with larger concerns such as how mutual funds will revalue international portfolios when the 11 existing currencies merge.

"We've basically been going out to clients on a regular basis with an ever-greater degree of detail and information about the process -- how it's going to work, procedures, conventions, disputes about conventions, resolutions of them -- across all products," said Stephen Jonathan, director of foreign exchange and emerging markets at Merrill Lynch and Co.

Merrill even has an Internet site to field queries, he said.

New York forex desks have already downsized to adjust for the sharp drop in trading volume in Europe's so-called legacy currencies this year. Those who trade dollars against marks, still an active pair, will simply start quoting euros on January 4 -- no big leap for a veteran dealer.

To handle the expected flood of inquiries,Citibank will add one euro dealer to complement its current three dollar/mark pros.

Even as the professionals switch to euro trading, many customers can wait awhile. Commercial transactions can still be conducted in the legacy currencies until marks, lire, pesetas, etc. are completely phased out with the widespread circulation of euro bank notes and coins in 2002.

"On the corporate side, they will continue to deal in the local currencies," said Kemp. "I don't think they've made the system changes as of yet because they don't need to for another two years. They will move to euros as of when their European subsidiaries or their European suppliers or buyers demand it of them."